July/August 2011

FEATURES

Post-‘Crash’ Effects on Inventory Recovery Values: Where Are Values Today?-Lender activity has returned, as has the customers’ leverage in negotiating in this competitive lending environment. However, when it comes to monitoring their portfolios, lenders need to remain diligent to ensure that appraisals are being completed in a timely manner based on the level of risk and in such a way that accurately reflect current recovery values in the marketplace.By Ed Zimmerlin, Jr., SVP, Inventory Group Leader, Hilco Appraisal Services and Laura Brodeur SVP, Appraisal Operations, Retail and Consumer Products Division, Hilco Appraisal Services

The Detection of Change: Technology Advances in the Management of Risk-Ever since commercial lending was identified as one of the most appropriate financial products to support rapidly growing companies, lenders everywhere have suffered at the hands of fraudsters. It is almost an inevitable consequence of financing dynamic collateral such as accounts receivable.By Jeffrey Jacobs, Director of Business Development, RiskFactor Solutions Limited

Ten Things Asset-Based Lenders Should Know About Machinery & Equipment Auction Sales-The auction platform is now more popular than ever, with more choices for both sellers and buyers. To the finance industry, public auctions were once considered "fire sales," representing the lowest possible recovery. Today, a properly conducted and executed auction sale strategy will reach a more active, targeted market, at a far lower cost, and generate greater net proceeds than an extended orderly liquidation.By Marc A. Eli Swirsky, President, LiquiTec Industries, Inc.

For the Love of People… Peter Schwab Reflects on His 40 Years in ABL-As an education major turned asset-based lender Peter Schwab learned his lessons well along the way. ABF Journal spent time with Schwab to find out more about the defining events of his career and the legacy he leaves behind at Wells Fargo Capital Finance. And while the deals factored heavily in his success, it’s the people he led that mattered most.
By Stuart P. Papavassiliou, Senior Editor

When Selling Charged-Off Loans and Leases Makes Smart Sense-Finance executives often bristle when they first hear the prices offered by a debt buyer for their charged-off accounts, or they operate off of a general notion that selling their debt just doesn’t make economic sense. What they are often missing, however, is a deeper analysis of their actual overall bad debt liquidation costs and assumptions.By Mark D. Erickson, SVP, Commercial Business Leader, SquareTwo Financial

COMPANY/EXECUTIVE PROFILE

FirstMerit Business Credit: Launched in Adverse Times, This Two-Year Old Sets Its Sights High-Launching an ABL group in the face of the worst recession since the Great Depression proved to be a rewarding challenge for industry veteran Douglas Winget, president of FirstMerit Bank Business Credit. Starting in Q1/09, Winget has successfully developed the ABL’s strategy, management team, territory and originations, and its pipeline for the remainder of 2011 is stronger than it’s ever been.By Lisa M. Goetz, Associate Editor, ABF Journal

FROM ALL FACETS

TURNAROUND CORNER

From ‘To Do’ to ‘Must Do’ Strategic Planning Best Practices — Part 1-Right now many companies worldwide are caught in the vice of accelerating change in the world economic order and perhaps even more rapid changes in how business is being done. While always important, effective strategic planning is a must-do item on the CEO’s “to do” list. In Part I of this two-part article, Ken Naglewski of Seabiscuit Partners, provides a penetrating look at what is strategy and a perspective on best practices.By Ken Naglewski, Principal, Seabiscuit Partners, LLC

BANKRUPTCY UPDATE

Ethanol Industry … Running on Empty?-At one time, investors in the ethanol business thought they could go in small with one plant and make a fortune, but it isn’t turning out that way. Conglomerates continue to purchase the investor’s expensive assets for a small percentage of the cost. New investors need to understand the challenge of scale when competing in a business where the profits are measured in pennies.By Rob Carringer, Managing Partner, CRG Partners

FACTORING FOCUS

Small Business Capital Delivery: A Paradigm Shift-As the economy improves, finance providers want to provide capital or extend credit and small businesses continue to need the financial support. Traditional risk scoring and risk management models aren’t getting the job done, and a new paradigm may be needed. Finance providers that embrace new approaches will win in the small business market … and so will the economy.By Glenn Goldman, President & CEO, Capital Access Network, Inc.

LEGAL EYES

Southern District Establishes Standards for ‘Good Faith’ Participation in Court-Ordered Mediation: Part I-The A.T. Reynolds & Sons, Inc. decision reverses the bankruptcy court’s order holding the secured lender in the underlying bankruptcy proceeding, and its counsel, in contempt for failing to mediate in good faith and imposing sanctions upon them. The decision not only vindicates the lender and its counsel for its “no pay” position taken at the mediation, but also articulates a clear and objective standard for parties’ future “good faith” participation in a court-ordered mediation.By Jeffrey A. Wurst, Esq., Senior Partner, Chair, Financial Services, Banking and Bankruptcy, Ruskin Moscou Faltischek, P.C. and Daniel L. McAuliffe, Esq., Counsel, Ruskin Moscou Faltischek, P.C.